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Volume 9 - Opinions of Counsel SBEA No. 112

Opinions of Counsel index

Correction of errors (clerical error) (failure to grant partial exemption); Assessment review (grounds for review) (denial of partial exemption) - Real Property Tax Law, §§ 522, 550, 701, 729:

Where an assessor fails to act on an application for a partial exemption, that act of omission may be corrected pursuant to the correction of errors procedures of title 3 of Article 5 of the Real Property Tax Law. Where, however, the assessor fails to grant a partial exemption because the assessor determines that the parcel for which the exemption is sought is not entitled to the exemption, that act of commission is reviewable only through the assessment review procedures of Article 5, title 1-A, and Article 7, titles 1 and 1-A, of the RPTL.

We have received an inquiry concerning a failure to receive a partial exemption. A parcel owned by a veteran and his wife received an “eligible funds” veterans exemption (Real Property Tax Law, § 458) until 1982, when the title to the property was placed solely in the wife’s name. The exemption was then removed by the town board of assessors. The records of the present board of assessors do not include any explanation for the removal of the veterans exemption, but it was presumably due to the conveyance. The board of assessors has now advised the wife to file a new application for the exemption. The wife has recently been informed that she was entitled to receive the exemption even after the transfer of title, and she has asked whether she may now be reimbursed for the taxes she paid during the years her property did not receive the exemption.

The board of assessors erred in 1982 when it discontinued the exemption following the conveyance to the wife. Real Property Tax Law, section 458(1)(1), provides that title to property for which the eligible funds veterans exemption is sought may be in the spouse of the veteran and still qualify for the exemption (see, 2 Op.Counsel SBEA No. 101).

The current board of assessors was incorrect in informing the wife that she must “file again by next March” to be eligible for the exemption on next year’s assessment roll. There is no requirement that a recipient of the veterans exemption file any forms beyond the original application.

The principal question is whether the wife may be reimbursed for the “overcharged taxes.” An administrative refund of taxes is available pursuant to Real Property Tax Law, section 556, only where there has been a “clerical error,” “error in essential fact” or “unlawful entry” as those terms are defined in Real Property Tax Law, section 550. A “clerical error” is defined in section 550(2)(c), to include “an entry of assessed value . . . for a parcel which, except for a failure on the part of the assessor to act on a partial exemption, would be eligible for such partial exemption” (emphasis added).

The applicability of this definition depends on whether the error occurred because of the assessor’s omission or commission. In our opinion, this definition of “clerical error” is applicable only to those situations where the property owner has done all that he or she is statutorily required to do in order to qualify for exemption and the assessors fail by complete omission to process or “act” on the exemption prior to filing the tentative assessment roll (7 Op.Counsel SBEA No. 24).

The assessors’ intentional denial or discontinuance of a partial exemption (commission), even if erroneous, is not a failure to act. The taxpayer’s remedy for an assessor’s intentional denial or discontinuance of an exemption is the filing of a complaint with the board of assessment review claiming excessive assessment (RPTL, § 522(4)(b)), followed, if necessary, by a petition for judicial review, again claiming “excessive assessment” (RPTL, §§ 701(4)(b) [tax certiorari], 729(2)(b) [small claims assessment review]).

Accordingly, this situation will require further investigation to determine if the previous board of assessors intentionally removed this exemption or simply “failed to act” thereon. If there was a failure to act, an application for a refund of taxes pursuant to Real Property Tax Law, section 556, based upon a “clerical error,” must be made within three years from the annexation of the warrant for such tax. Accordingly, an EA-556 application form for a refund must be filed with the county director of real property tax services requesting a refund of taxes for the three previous town/county tax levies. (There is no administrative procedure whereby the “error” which occurred in earlier years may be corrected.) The county director will then investigate the circumstances of the claimed “clerical error” and transmit a written report of such investigation and his or her recommendation to the tax levying body (e.g., the county legislature). The tax levying body will then make a determination on the application for refund.

Finally, with respect to the current assessment roll which will be used in the next town/county tax levy, the wife must also file an EA-554 form for a corrected tax roll with the county director. This form is an application for a correction of a “clerical error” on the next town/county tax roll. The county director is again required to investigate the circumstances of the claimed error and file a written report with the tax levying body. The tax levying body will then decide whether to approve the application and issue a corrected tax bill.

August 20, 1992